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U.K. Regulator Lands Heathrow Slots as First Target Post Brexit

(Bloomberg) -- The U.K.’s competition watchdog is setting out what it wants to look like in a post-Brexit world -- and the first step is filling the regulatory gap.

The Competition and Markets Authority plans to probe control of the take-off and landing slots at London’s Heathrow Airport as part of an investigation into a British Airways alliance on transatlantic flights. It marked its first move to seek oversight of a transaction that would traditionally have been handled by the European Commission.

The CMA said it needs to prepare when the EU no longer has responsibility for competition in Britain even as the potential of a Brexit transition deal means it’s uncertain when the split may happen. The agency is set to face a greater workload when it takes on responsibility for all mergers that affect the U.K. after the country’s departure from the EU.

“There’s no guarantee the commission will look at the routes if there’s no deal," said Steven Vaz, a competition lawyer at Ashurst in London.

Brexit will give the British regulator the responsibility to examine the large transactions that had fallen under the commission’s purview. “Now, it will mean all the important cases,” Michael Grenfell, the CMA’s enforcement director, said in May.

The regulator plans to reassess a 2010 agreement with American Airlines, brokered by the European Commission, that saw the surrender of operator slots to rivals at London’s Heathrow and Gatwick airports. The deal, which is set to expire after 10 years, was put in place to address competition concerns on routes from London to the U.S.

International Consolidated Airlines Group SA, BA and Iberia’s parent company, said Thursday that it’s noted the CMA’s announcement and will respond to the review.

“The CMA has typically been fairly risk-averse, fairly mainstream,” said Pablo Ibanez Colomo, associate professor of law at the London School of Economics. “They’re saying that the thrust of the case concerns the U.K. and Heathrow, so we’re better placed than anyone else.”